The world's top mobile phone maker plans to build a €200 million plant in Romania, a government official said Friday.

We will sign a memorandum with Nokia Group next week. It is a €200 million investment,” Marius Nicoara, an official in the Transylvanian city of Cluj, told Reuters. A spokeswoman for the Finnish-based company in Helsinki said no agreements have been signed, but pointed out that a 30% increase last year in the manufacture of Nokia phones had placed strains on production capacity. The Romanian government will co-finance the investment by setting up infrastructure worth €33 million, including electricity, running water and sewerage systems.

The plant will employ 15,000 people. Foreign investors are eager to set up manufacturing facilities in Romania, hoping to benefit from low taxes, and a cheap and skilled workforce. Romania expects foreign direct investments to reach €7 billion this year, following a record €9.1 billion in 2006. However, the head of Romanian Agency for Foreign Investments told in an interview last week it expects greenfield investments to hit successive record highs in coming years.